“It is a great honor and privilege for me to be here tonight,” said Milton Friedman when he won the 1976 Nobel prize for economics. He marveled at the attention heaped upon Nobel prize-winners and confessed that although it is “flattering,” it is also “corrupting,” because it grants Nobel laureates an unearned authority to speak on matters outside their expertise. He quipped, “My own field suggests one obvious antidote: competition through the establishment of many more awards.”
A quarter-century later, philanthropists have taken his advice—with gusto. At least 30,000 monetary prizes are offered around the globe, all but around 10 percent established within the last two decades. New ones are coming on line all the time: In September, the Milwaukee-based Lynde and Harry Bradley Foundation plans to announce as many as four winners of the inaugural Bradley Prizes, each worth $250,000. A group called the International Congress of Distinguished Awards counts 128 prizes that are worth at least $100,000 apiece. There’s even a Milton Friedman Prize for Advancing Liberty, a $500,000 biennial prize offered for the first time last year by the Cato Institute.
Prizes provide philanthropists a new way to reward, publicize, and strengthen the individuals, institutions, and ideas they already support. They present many challenges, but also plenty of opportunities for those who know how to take advantage of them. “The business of prizes is the least understood $2 billion industry in the world,” says Larry E. Tice of the International Congress of Distinguished Awards.
There’s no prize for prizes, but a handful of award programs are widely recognized as especially successful. The Nobel Foundation offers prizes in chemistry, economics, literature, medicine, peace, and physics each year, and they are the gold standard. The Nobel Prizes are probably the best-known awards in the world, with a brand-name appeal and a lucrative purse. The $500,000 MacArthur fellowships sponsored by the John D. and Catherine T. MacArthur Foundation—sometimes called the “genius” awards—usually receive plenty of attention as well, if only because they’re so reliably quirky. The Pulitzer Prizes always attract attention, and also prove that it doesn’t take a six- or seven-figure payout to make a splash: They’re worth a relatively meager $7,500.
Since 1989, the El Pomar Foundation in Colorado Springs has run an innovative “Awards for Excellence” program that honors and supports outstanding local nonprofit groups throughout Colorado. There are 11 categories of competition in such areas as arts and humanities, education, and health care. Groups vying for the prizes are judged on their impact in the community, use of resources, and “overall excellence.” Each category produces two finalists, which receive $5,000, plus a winner, which receives $15,000. The foundation also presents a single nonprofit with the $25,000 Julie and Spencer Penrose Award to one group as a kind of grand prize in nonprofit achievement. Other awards go to nonprofit leaders and professionals.
“We’ve found that the Awards for Excellence allow us to celebrate the work these great nonprofits already do, not just ask what’s the next problem,” says Tamarinde Doan, El Pomar’s program director for the prizes. “These groups are then able to leverage their awards for fundraising and other purposes.” The El Pomar Foundation was established in 1937, and it’s one of the most respected names in Colorado’s grantmaking community. Its seal of approval has a way of accrediting recipients by sending a message to other philanthropists about which groups are especially worthy of support. “Some organizations that win El Pomar awards ask us if they can put that information on letterheads or banners,” says Doan. “We always say yes, of course.”
The El Pomar awards attract considerable attention in Colorado, because they’re presented at a large banquet that’s filmed for broadcast on the local PBS station. What’s more, the foundation produces a 30-second video clip describing the work of each finalist. These are played at the awards ceremony—further increasing awareness of outstanding nonprofits—and then made available to the groups for their own use.
The most obvious beneficiaries of El Pomar’s prizes are the recipients, who win money and prestige. At the same time, the foundation advances its own interests by giving general operating support to certain types of nonprofits and strengthening its own position as a leader in Colorado’s philanthropic community. The prizes also avoid the rigors of a long grant-application process and the unpleasantness of having to notify all the turndowns. Among recipient organizations, there’s a big psychological difference between not receiving a normal operating grant and not winning an award: The former can create bitterness, while the latter may inspire increased effort. Finally, the El Pomar awards also demonstrate that even a fairly small amount of money can go a long way. “Sometimes the recipients have budgets that are so small we have to disperse the award money over time so it doesn’t make up too much of their income in any given year,” says Doan.
The Phillips Foundation in Maryland also has discovered that a little money can make a big difference. Its journalism fellowship program provides a $40,000 grant plus $10,000 in expenses to print journalists who want to work on long-term projects, such books or magazine articles. They have to have less than five years’ experience in the profession, which means the recipients are usually young people. The fellowships are competitive, so they are like prizes in the sense that there are candidates for them and there are winners. “It’s a way for us to give talented people a leg up as they begin their careers,” says John Farley, secretary of the Phillips Foundation. “The fellowship gives them a credential and provides them with some gravitas.”
A Learning Experience
Some foundations have been able to use prizes as a way to explore potential areas of grantmaking. “Quite apart from that public purpose, we’ve found that award giving is a way to get acquainted with new, unfamiliar fields,” says one philanthropist. “Years ago, when we knew next to nothing about the independent sector, we supported an experimental awards program . . . . I can’t think of any other way we could have learned more about the state of the sector so quickly and economically.”
One of the special challenges for philanthropists is to know their audience. Prize giving by its nature is a public endeavor. Nearly all awards struggle for recognition, and sometimes they confront a dreaded problem: What if you gave a prize and nobody came? That’s what happened to Tice, who worked at Philadelphia’s Franklin Institute in the early 1990s, shortly after the chemical manufacturer Henry Bower donated $7.5 million for a new awards program. “I was responsible for setting up a $250,000 prize that we thought the world would love,” says Tice. “Then we gave it, and nobody paid any attention.” The Bower Award for achievement in science was supposed to turn heads with its big dollar amount but instead drew yawns. Only a handful of people attended the press conference when the first one was announced.
That’s a nightmare scenario for anybody who makes a substantial investment in a prize. Still, if one sets reasonable goals—which may not include a page-one New York Times story—it’s possible to create an award that achieves those goals. Before building a new prize program, philanthropists should study the ones that already exist, or at least the successful ones. They’ve gotten to where they are by appreciating both the opportunities and challenges any award encounters, as well as by developing smart strategies for taking full advantage of their sponsor’s available resources. There’s no surefire recipe for success, but a variety of particular approaches appear to have worked for a number of foundations. These include awarding big sums to the winners, focusing on niche categories, creating a credible selection process, and targeting distinct audiences.
“My advice to anybody who wants to start a new prize is to study the example of Alfred Nobel,” says Sir John Templeton, a Tennessee native who is now a naturalized British citizen—and whose Templeton Prize announced its thirtieth annual recipient earlier this year. “Nobel showed that a small amount of money could have a great influence and provide a tremendous service to humanity. Only some people can win a Nobel Prize, but many others aim their whole careers in a certain direction because they hope to.”
Templeton created what is probably the only award to rival the Nobels: the Templeton Prize for Progress Toward Research or Discoveries about Spiritual Realities. Despite the clunky name, it draws wide notice every year, in part because it’s the most lucrative prize on the planet. That honor once belonged to the Nobel Prizes, but Templeton insisted that his make a larger financial statement. Right now, a Nobel Prize is worth 10 million Swedish krona, or roughly $1.15 million; the Templeton Prize outdoes it by about $20,000. (It also doesn’t hurt that Prince Philip awards the prize at Buckingham Palace every year.)
Most foundations can’t afford such high amounts, of course. In addition to Nobel and Templeton, the million-dollar club has only a few members, such as the Al Neuharth Free Spirit of the Year Award, the Conrad N. Hilton Humanitarian Prize, and the three annual Dan David Prizes. Another half-dozen or so are worth $500,000. “Awards of $100,000 used to be especially distinctive,” says Tice. “Now it takes $250,000 to stand out, and soon it may be twice that. It’s like a bidding war.”
Yet money isn’t everything, as the experience of the El Pomar Foundation and the Phillips Foundation demonstrate. The Zayed International Prize for the Environment, sponsored by the United Arab Emirates, hands out $1 million in three categories, including a top award of $500,000. In 2001, Jimmy Carter won the first Zayed Prize, but it attracted almost no press coverage in the United States. The Washington Post, for instance, has never mentioned the prize anywhere on its pages. The New York Times has referred to it only once, in a sentence that simply says the award exists.
So Templeton can’t be accused of merely buying his way into the prize market. Something else was crucial to his success: By choosing religion as an award category, he picked an area Nobel had neglected entirely—and one few other foundations focus on. Among all the prizes valued at more than $100,000, only the Templeton Prize has a religious component. (Religious leaders sometimes win the “humanitarian” or “peace” awards, but typically for their secular activities.) Religion may seem like a pretty big niche to fill, but that’s exactly what Templeton did.
One of the worst things a foundation can do, at least from the standpoint of publicity, is duplicate a prize that already exists. And yet this happens all the time. “I took a call recently from an Australian group that wanted to create an alternative to the Nobel Peace Prize—they said they wanted to create the other peace prize,” says Tice. Surely there’s room for more than one award in a single field, especially one as broad and controversial as “peace.” But there’s probably a ceiling, too. Tice informed his callers that their alternative already existed about a dozen times over. They ultimately decided not to enter a crowded field.
A similar tendency is for prizes to recognize the same people over and over again, especially in science. Harvard University zoologist Ernst Mayr lists 33 prizes on his curriculum vitae, for instance. They include the prestigious the Balzan Prize in Biology in 1983, the International Prize for Biology (also known as the Japan Prize) in 1994, and the Crafoord Prize of the Royal Swedish Academy of Sciences in 1999. Taken together, these three awards would be worth about $1.5 million if they were conferred today. A single person winning multiple prizes is good in the sense that it confirms the judgment of others and guards against flukes. Yet it’s also redundant. For foundations with limited resources trying to make a distinctive mark in a particular area, this is a problem worth avoiding.
One way to generate prestige for a prize is to design a credible selection process. The U.S. tax code mandates the beginnings of this. Grantmaking foundations aren’t supposed to give money directly to individuals, of course. Research funds and the like must first pass through nonprofit organizations that are entitled to receive them. Awards are different, and the IRS has established rules that allow foundations to cut out middlemen. In this sense, prize programs are similar to scholarship programs. There are restrictions on who may receive awards; people associated with the foundation and their family members are not eligible. Other strictures lead many prize programs to set up independent committees of advisors and judges.
Most foundations first require people to be nominated for an award before they can be considered for it. Nominations may be open to the public at large, or open to a large segment of the public. The Nobel Prize in Literature, for instance, allows professors and members of literary societies to make recommendations—an enormous group of people. After the deadline for nominations passes, they generally go before a screening committee that creates a manageable pool of candidates. This list of finalists then undergoes further vetting until a winner is chosen.
To take another example, winners of the forthcoming Bradley Awards will be drawn from nominations made by a list of about 100 people selected in private by the Bradley Foundation. The secret nominators—whose identities are not disclosed during the nominating period in order to keep people from lobbying them—are invited to recommend suitable candidates in the areas of intellectual and civic achievement. These names then go before a special committee composed of six nominators and three employees or trustees of the foundation, and they choose up to four recipients.
The Jefferson Awards for Public Service, given each year at the Supreme Court, follow an ingenious nomination procedure that also encourages media attention. An award is given to an unsung community hero in each of about 60 media markets. Nominations come from local TV stations and newspapers, which then have an interest in giving news coverage to both the prize winners and the ceremony.
Many organizations use selection committees to build credibility for their awards. The El Pomar Foundation uses a commission of local leaders to pick winners; the Phillips Foundation’s journalism fellowships are selected by a small committee whose members include the nationally syndicated columnist Robert Novak. The Cato Institute’s Milton Friedman Prize, presented “to an individual who has made a significant contribution to advance human freedom,” is selected by a committee whose members include Czech statesman Václav Klaus, FedEx CEO Frederick W. Smith, economist Hernando de Soto, and former British prime minister Margaret Thatcher. The winner of the Philadelphia Liberty Medal, given at Independence Hall every 4th of July, is chosen by an international panel chaired by Martin Meyerson, president emeritus of the University of Pennsylvania. The Northcote Parkinson Fund, which presents an annual civil courage prize for “steadfast resistance to evil at great personal risk,” employs an advisory panel of South African jurist Richard J. Goldstone, former U.S. representative to the United Nations Jeane Kirkpatrick, Soviet dissident Aleksandr Solzhenitsyn, and others. They receive a full set of dossiers on 25 or fewer finalists, make numeric recommendations on them, and pass along their opinions to the board of trustees, which chooses winners. “The advisors underscore the legitimacy of our efforts,” says Ann Sloane, a Northcote Parkinson trustee. “They’re recognizable to various constituencies, whereas the trustees are just private citizens.”
Constituencies are something Sir John Templeton understands: His prize goes before a nine-member panel that has at least one representative from each of the world’s five major religions. Like many other prize makers, Templeton rotates his panel. Each member serves a three-year term and any given year it has three new members. “Things bog down if you have the same people doing it all the time,” he says. “More people around the world know about our award, too, because of the increased exposure that comes from additional judges.” Over time, credibility grows, and approaching prizes with a healthy dose of patience is helpful. “We’re in this for the long haul,” says Sheila Mulcahy of the William E. Simon Foundation, which for the last three years has awarded a pair of $250,000 prizes to recognize excellence in philanthropic leadership and social entrepreneurship.
Sometimes big money, a smart category, and great judges still aren’t enough for a prize. The final piece of the recipe involves expectations—and the recognition that most prizes have a specific audience rather than a general one. “You have to consider who it is you’re trying to reach,” says Judy Miller of the Conrad N. Hilton Foundation. “Lots of people go into this business thinking they’ll receive publicity and visibility, but the media aren’t always interested.” The Hilton Humanitarian Award goes to organizations rather than individuals, and it’s one of the world’s few seven-figure prizes. Even so, Miller understands that it doesn’t have universal appeal and that she can have an enormous impact within a limited area. “It’s more important to us that people within the humanitarian and human rights fields know about the prize and hear about the winning organization,” she says. To augment this effect, Hilton hands out its award each year at a major humanitarian conference—in other words, at an event whose theme reflects the purpose of the prize.
The Thomas B. Fordham Foundation has taken a similar approach with its Fordham Prizes for Excellence in Education, which were awarded for the first time in February. The foundation doesn’t have the funding to give away a million dollars a year, and it also specializes in a subject matter that’s already saturated with prizes. But that doesn’t mean it can’t play a useful role. “The problem is that all the established major awards go to conventional recipients,” says president Chester E. Finn. “Almost without exception they go to people whose work props up the status quo or justifies it.” Finn says that he and his longtime colleague Diane Ravitch have participated as nominators for several awards, but without encouraging results. “Our recommendations were never accepted,” he says. “The Fordham Prizes are supposed to correct the balance.”
There are two prizes, in separate categories, and each one is worth $25,000. That makes Fordham a bit player in the world of prizes. The International Congress of Distinguished Awards won’t be impressed until they quadruple in size. Even so, says Finn, $25,000 is “a sum worth winning.” And he isn’t planning to change the world. “We’re not expecting the general public to notice our prizes,” he says. “But we do expect people within our field of endeavor to take notice.” Stories in Education Week and the Washington Post pleased him, especially considering the prizes were announced in Washington, D.C., on the day after a snowstorm crippled the city. “We were able to recognize and reward good work, cause the people who do it to feel appreciated, and, we hope, stimulate more of it,” says Finn. The Fordham Foundation will present the awards through 2007 and continue beyond that if it believes they still serve a useful purpose.
If organizations that go into the prize business don’t know it beforehand, they soon learn that successful programs can have many costs beyond handing checks to winners. Staff time is often the largest budget item, but there are many other expenses, too. Contacting potential nominators through letters and advertising, underwriting a formal selection process that might require in-person committee meetings, hosting an event or ceremony recognizing winners, and making gifts in addition to cash awards (such as medals and certificates)—each of these runs up costs. A competent prize may require tens of thousands of dollars, even if the sponsor cuts costs by having committee meetings over the phone and announces the winners at a small press conference rather than a gala dinner.
There are many other practical considerations as well. The Northcote Parkinson Fund’s civil courage award is an international prize, and the sponsors originally made their announcement in different venues, from New York to London to Italy. But they found that it was hard to make brand-new media contacts every year in each new market, says Sloane. The awards are now presented in New York. The Hilton Foundation, however, finds that new locations each year have allowed it to deliver a precise message to a particular group of people.
One foundation learned it may make sense to announce winners well in advance of an event honoring them, because it’s easier to arrange media appearances. Another discovered that nominators make mistakes. “We’ve reclassified entries when we’ve felt nominators haven’t understood the categories, and this has affected outcomes,” says one prize administrator. It’s also important not to panic. “I would say that 90 percent of our nominees came within 48 hours of the deadline,” says Fordham’s Finn. “For a while, we didn’t know if we were going to have a credible spread of candidates.”
The explosion of interest in handing out awards recalls what the Dodo says at the end of a race in Lewis Carroll’s Alice in Wonderland: “Everybody has won, and all must have prizes.” Yet the experience of many foundations shows that there’s always room for more prizes, especially if they’re conceived with intelligence and run with a proper understanding of what they can achieve.